OfflineYounger Buyers Buying Retirement Real Estate
No, they’re not buying for themselves, but instead for investment. The average age of buyers in some of the largest Florida retirement communities has been dropping. One reason is that there have been distressed and foreclosure bargains that created value. Buying before actual retirement and having their future home in place is appealing to many buyers.
However, though you have to be 55 or older to live in many of them, you can buy one if you’re younger and rent to an older individual. Young buyers with the money are finding this to be a great investment play, as their tenants are generally stable and pay their rent.
Home Prices Biggest Rise Since the Bubble Burst
In January, home prices rose 8.1% according to the S&P Case-Shiller Index of the 20 largest markets in the nation. This is the largest year over year gain since 2006. A major influence is a very low inventory. There isn’t enough in inventory for current demand.
Lender-Placed Insurance Being Investigated
You know, it’s that insurance that’s slapped on you by your lender if your home or car policy lapses for whatever reason. While it is understood that lenders must protect their collateral, complaints have for years been coming in about the high cost of these policies. Critics say that the major reason is commissions paid to servicers by the insurance carriers.
In addition to buying the home you will live in, now is a good time to purchase investment real estate. Prices are still low and there is solid evidence showing that the economy is recovering. This indicates that a nice return is really possible if the investment is good (i.e. good condition, good location, and good design).
When you combine this with higher than average rental rates, caused by tightening mortgage requirements; the positive cash flow will only enhance the investment yield. This explains why some prefer to rent and buy investment properties.